X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Corporate earnings, world reserves and more... - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Apr 29, 2008

    Corporate earnings, world reserves and more...

    • Results of India Inc. have started pouring in and the scenario presented is rather mixed. In the IT space, while the top four heavyweights have posted decent results for FY08, growth nevertheless has been impacted by the sharp 11% appreciation of the rupee against the US dollar. Managements of these companies have indicated that while clients are seeing business restructuring and leadership changes and expect technology spending to slow down for the next two quarters, there are expectations of a pick up after that considering the leverage that offshore outsourcing provides them (the clients). In the auto space so far, both Maruti and Hero Honda have reported results. While Hero Honda has performed well against a backdrop of declining two wheeler sales, Maruti was also able to post a decent growth in volumes. That said, rising steel prices are likely to weigh heavy on the profitability of auto companies going forward. The banking sector has been subject to mixed fortunes as well. While both Axis Bank and HDFC Bank posted strong results, ICICI Bank's performance left a lot to be desired. Just to put things into perspective, while both Axis Bank and HDFC Bank posted 62% YoY and 35% YoY growth in advances respectively, ICICI Bank's advances grew by a considerably slower 15% YoY.

    • Morgan Stanley (through its Global Economic Forum) has stated that the world's foreign exchange reserves now stand at a mammoth US$ 6.6 trillion reflecting a growth of 25% YoY (or an increase of US$ 1,355 bn). If this pace continues, it is expected total official reserves to breach the US$ 8 trillion mark by the end of this year. Another key point to be noted is that Asian countries and oil exporting countries account for a larger part of the reserves. For instance, while Asia has reported reserves of US$ 4.1 trillion, the same for the oil exporting nations stand at US$ 1.1 trillion. In these countries especially, intervention has played a key role in the accumulation of reserves to arrest the sharp appreciation of their respective currencies. Over the last 12 months, the proportion of growth coming from interventions has been almost 70%. Buoyant oil prices have largely benefited the Gulf countries helping them in adding on to their reserves. In terms of total reserves in the world, China leads the pack with reserves of US$ 1.57 trillion, followed by Japan (US$ 1 trillion) and Russia (US$ 507 bn). India's forex reserves stand at US$ 333 bn.

    • While Europe has been the next focus destination for Indian pharma companies given the intense pricing pressure in the US, the scenario has not been hunky dory. For instance, UK has been facing brutal price erosion as market conditions are very akin to those in the US, given that generics cannot be branded. And in recent times, pricing pressure has started creeping into the other European markets as well. A case in point is Germany. The German government has undertaken changes in healthcare reforms, which has increased the differential between the price of a branded drug and that of a generic and hence top companies in that country have had to considerably slash the prices of their generic drugs.

      This has been amply reflected in Dr. Reddy's 9mFY08 results, which were partly impacted due to the muted performance of Betapharm. Ranbaxy, too, has been facing the heat especially in the UK and France. While the company's French operations have managed to break even, the performance in this region has nevertheless been sluggish. Even Terapia, the Romanian company acquired by Ranbaxy, faced a substantial decline in sales in 1QCY08 owing to the uncertainty of healthcare reforms post Romania's integration with the European Union in CY07. As a result, most of these companies are now increasing focus on the emerging markets as generics can be branded in these regions consequently leading to higher profitability.

     

     

    Equitymaster requests your view! Post a comment on "Corporate earnings, world reserves and more...". Click here!

      
     

    More Views on News

    How to Ride Alongside India's Best Fund Managers (The 5 Minute Wrapup)

    Jun 10, 2017

    Forty Indian investing gurus, as worthy of imitation as the legendary Peter Lynch, can help you get rich in the stock market.

    Mughal Money: How a 14th Century Emperor Proves Gresham's Law (The 5 Minute Wrapup)

    Aug 24, 2017

    How a fourteenth century Mughal story holds one of the key essences of safe stock investing.

    5 Attributes Of Lord Ganesha You Can Apply To Your Personal Finance (Outside View)

    Aug 24, 2017

    With Lord Ganesha's attributes and teachings, awaken your inner-self and inculcate these financial habits for a sound future.

    Why Shopping Online This Festive Season Makes Better Sense (Outside View)

    Aug 24, 2017

    Online shopping if done sensibly can help you save money and carries many other advantages.

    Mr Trump Has Been Broken (Vivek Kaul's Diary)

    Aug 24, 2017

    Kelly, Mattis, McMaster, Cohn, and Mnuchin are in charge. But these Pentagon bureaucrats and Wall Street hustlers may be worse than a loose-cannon president.

    More Views on News

    Most Popular

    This Small Cap Can Drive Chinese Players Out of India (and Make a Fortune in the Process)(The 5 Minute Wrapup)

    Aug 17, 2017

    A small-cap Indian company with high-return potential and blue-chip-like stability is set to supplant the Chinese players in this niche segment.

    Dear PM Modi, India is Already Land of Self-Employed, and It Ain't Working(Vivek Kaul's Diary)

    Aug 21, 2017

    Most Indians who cannot find jobs, look at becoming self-employed.

    It's the Best Time to Buy IT Stocks(Daily Profit Hunter)

    Aug 16, 2017

    The IT Sector could be in an uptrend till February 2019. Are you prepared to ride the trend?

    Think Twice Before You Keep Money In A Savings Bank Account(Outside View)

    Aug 22, 2017

    Post demonetisation, a cut in bank savings deposits rates was in the offing.

    5 Steps To Become Financially Independent(Outside View)

    Aug 16, 2017

    Ensure your financial Independence, and pledge to start the journey towards financial freedom today!

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    S&P BSE SENSEX


    Aug 24, 2017 03:36 PM

    MARKET STATS